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GENERAL NEWS

Our CEO on why Cinemas will rebound ‘skinnier and hungry to succeed’

1 April

“Sometimes a crisis brings out the best in people and I think we’ve seen that in our industry.”

Benjamin Zeccola, CEO of Palace Cinemas sat down with Don Groves of IF Magazine to discuss the current state of the cinema industry, why Palace were the first cinema circuit to close amid the COVID-19 crisis and how our cinema and film industries will come together to relaunch Australia’s favourite form of entertainment when the time is right. You can read the full interview from IF Magazine below or HERE:

Q: Why you were the first to close?

A: It was obvious that cinemas had to close. The audience for Palace Cinemas is somewhat older than the general cinema going population and our customers had already begun to demonstrate that they were self-isolating and concerned for their health. The government issued instructions about 100 people caps and it was obvious those couldn’t be enforced; therefore we took the very difficult decision to close for the good of the community and staff.

Q: How many staffers/casual workers did you have to stand down?

A: About 550 staff were consulted and had to be stood down unfortunately.

Q: Do you think (as I do) there will be a rapid recovery in exhibition once the crisis is over, given the pent-up demand from moviegoers?

A: I believe the industry will come together to relaunch Australia’s favourite form of entertainment and together with great product and terrific promotion there will be a pent-up demand for cinema. However this cannot be rushed; until Australians feel safe there will be a very slow ramp up. I believe there will be a tipping point which unlocks that pent-up demand and the cinema industry needs to work together with government to get the timing right because, if we get it wrong, many businesses will fail.

Q: Are you afraid that many small screens may not re-open as the people who ran them have given up or are now doing other things, so there could be a net loss of screens?

A: I believe that all affected businesses are going into a form of hibernation and when winter is over they will all emerge, significantly skinnier, but alive and hungry to succeed.

Q: I expect there will be a bunfight for screens given dozens of movies have had to be postponed, although I suspect some US titles will go straight to digital if this continues for months, so you will be spoiled for choice?

A: The releases will be spread out, because although there were several films lining up to be released which had been postponed, there are also films in production that have been halted; therefore the supply chain will smooth itself out.

Q: I assume you are happy to see the early digital release of titles like Emma, Miss Fisher and the Crypt of Tears and The Invisible Man because at least more people will see films and they will be eager to embrace cinemas again?

A: For the films whose theatrical release was interrupted by COVID-19 I think it’s right that they were given an early digital release on a no-precedent basis given these extraordinary circumstances. We will bend over backwards to help the distributors and studios behind those films just as they’ve bent over backwards to help us during this difficult time. Sometimes a crisis brings out the best in people and I think we’ve seen that in our industry.

Q: I know no one can predict how long this shutdown will last but as IF reported Roadshow has dated Wonder Woman 1984 for August 13, the day before the US, so that could be a date to aim for, if not sooner?

A: I like that date as a goal, however it will depend on the progress of the virus or ‘the curve’ to make decisions about re-opening dates. We would love to aim for August 13 but the truth is we will wait until we have more information to make that decision. I certainly expect that by September cinemas should be ramping up for a terrific summer.

It’s going to be a long and difficult winter for exhibition and distribution. It seems the government has taken the right actions regarding the Jobkeeper package and that will go a long way to keeping businesses alive.

The Number One concern that I have is about our rental agreements with our landlords, several of whom have been understanding. However we require every single landlord to pass on the benefits they themselves are receiving in order to survive this crisis.

Q: Last year you were looking to partner with an equity investor. What happened?

A: Last year Palace engaged PwC to establish interest in taking on an equity partner. We communicated this openly to our staff and interested parties at the time and there was overwhelming interest (and there still is). However in the end the timing didn’t work out and we were happy to remain a private family business.

Q: On a personal note, what are you doing with the downtime?

A: I’ve been working seven days a week for the past three weeks. I haven’t had any downtime; the administrative burden, having to put the cinemas into hibernation, the burden’s been enormous. However I am proud that we have not made a single person redundant. Every single person that was with us in early March will be with us later in the year when we reopen.

Personally I can’t wait until the end of the year when it warms up again and hopefully with the cinemas operating as normal… I’m fantacizing about taking the team to the pub for an afternoon, for a relaxing beer and to release the tension and laugh about the incredible ordeal that we went through.

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